Lionsgate Earnings Show Spike in TV Production Revenue

SANTA MONICA: Television production revenue grew 96 percent at Lionsgate, which reported adjusted net income for the quarter at a record $110 million.

This record adjusted net income was up 6 percent from the year-ago delivery, benefiting from a lower effective tax rate and higher equity interest income (thanks in part to the EPIX pay-TV venture). Quarterly revenue at Lionsgate was $751.3 million, a decline of 11 percent from $839.9 million in the prior year quarter, as declines in motion-picture revenue offset gains in television-production revenue. Adjusted EBITDA was $146.8 million, compared to $161.6 million in the prior year quarter.

Overall motion-picture-segment revenue for the quarter was $590.1 million, a decline of 22 percent compared to the prior-year quarter. There were only two wide theatrical releases in the quarter, Mockingjay—Part 1 and John Wick, compared to four in the comparison period. Lionsgate's home-entertainment revenue for the quarter was also down, from $200.7 million in the prior year quarter to $183.1 million, again due primarily to the smaller slate of theatrical films. Television revenue included in the motion-picture segment for the quarter was $82.9 million, compared to $105.8 million in the prior year quarter, with only one new wide-release theatrical title, Divergent, reaching its pay-TV window (compared to five wide release theatrical titles in the prior year quarter). International motion-picture-segment revenue (excluding Lionsgate U.K.) for the quarter was $79.4 million, compared to $117.1 million. Lionsgate U.K. saw revenue increase 12 percent to $62.7 million.

Revenue for the television-production segment climbed to $161.2 million in the quarter, nearly doubling the $82.3 million in the prior year quarter, with a strong performance in domestic TV licensing as well as gains in international TV revenue and home entertainment revenue from TV production. A record 74 episodes and 58.5 hours of domestic television series were delivered, including episodes of Anger Management, Orange Is the New Black, Nashville, Ascension, Mad Men and Manhattan. The quarter also benefited from significant domestic television revenue from the game and talk shows Celebrity Name Game, Family Feud and The Wendy Williams Show. International TV revenue included licensing of Anger Management, Orange Is the New Black, Nashville and Mad Men.

"Our strong financial results in the quarter were driven by growing margins across our businesses," said Jon Feltheimer, Lionsgate's CEO. "Our television division had another stellar quarter as it continues to emerge as a leading supplier of premium scripted content, and our film business achieved strong profitability with a diverse portfolio of films. We're also pleased to see our digital initiatives beginning to deliver incremental revenue and profits, and we expect their contributions to continue to grow."